Wednesday, February 20, 2008

Wednesday Upside Move

Top Line: The stock market staged a neat recovery on Wednesday flying in the face of higher CPI numbers. The cause of the rally is questionable because it is based on the belief that the worst is over. This will bring disappointment for many but not today. Our current stance is that the market could move back to the 12,750 range but would run into trouble there. Surprises to the downside for most.

The CPI news should have the bulls running for cover because higher inflation should mean a tougher Fed...but that is so Paul Volker and the Fed of many years ago. On Wednesday the Fed stated clearly that it was ready to lower rates again if they felt it was necessary and that inflation wasn't going to be a problem due to slower economic growth. Ok, whatever you say, we should believe.

Our thought is that a 100 point Dow move is just so much noise. Stocks have been hit hard this year and a little move just gives bulls hope, no real fuel for a sustained advance. Hope doesn't drive stocks.

We saw a good article on the mortgage crisis that we thought we'd share and since it's so late this evening we will again let someone else write the Update.

FSI: 78.11

1 comment:

Unnati Aranya Apartments Noida said...

This was actually what I was looking for,This for sharing and keep up the good Information…
unnati fortune
aranya noida
aranya noida
aranya sector 119
unnati aranya noida sec-119